Walmart Case Study

Wal-Mart Case Study

        Wal-Mart is one of the biggest employers in the United States, Second only to the federal government. When Wal-Mart became the largest U.S. Company in sales in 2002, it started to attract a lot of increased attention. One of the biggest issues they faced at the beginning was the criticism for providing low wages and inadequate health care benefits. This was causing small merchants to be driven out; it was damaging the culture of small towns, harming the environment, and violating workers’ rights. The nonmarket pressure on Wal-Mart seemed to be increasing rapidly, which lead to observers linking the pressure to its stock price.

        When it comes to Wal-Mart’s Market Strategy, they base it on low prices backed by efficiency. The second component of Wal-Mart’s growth strategy was to expand its offerings. Along with these two strategies for growth, they also focused on two central pillars in their business model, which were to avoid unionization and its workforce. They gave employees “I can speak for myself “buttons to their employees to help them speak directly to management instead of having to pay someone to talk for them. Also, the opportunity for advancement is one of the biggest reasons people are “eager” to work for Wal-Mart.

        What are some of the primary issues facing Wal-Mart? With Wal-Mart being such a huge company, it’s bound to run into some problems. Groceries, the Environment, Wages, and Working conditions in suppliers’ overseas factories are the biggest concerns they are facing. A lot of groceries stores around the U.S. had to close down due to Wal-Mart selling groceries, which put a lot of people out of jobs, as well as making customers, pay more for foods. Wal-Mart had to reach a settlement with the EPA when it violated the Clean Water Act in 17 different states. They are also being criticized by the footprint of its stores and parking lots. With the huge amount, it is reducing green spaces and wetlands and contributing to urban sprawl. People say that Wal-Mart’s wages are too low. Critics say that with all the sales they make, they could afford to bump up wages to help support single wage earning households. Wal-Mart however countered and said that only 7 percent of employees are single wage earners supporting a family, and their average wage is twice as high as minimum wage. Lastly, Working conditions in suppliers’ overseas factories are a troubling problem. The international Labor Rights Fund filed a lawsuit against Wal-Mart for unlawful acts in their overseas factories in five different countries. Just to show how bad it is, 1,200 factories were suspended for 90 days, while 108 were permanently banned. To fix this problem, critics demanded that Wal-Mart agree to unannounced and independent inspections rather than use its own inspectors. This would help in keeping factories running in the right way, and stop any future lawsuits.